‘Iran-US war hurting Nigeria’s real estate’

Experts in Nigeria's real estate sector are raising alarms about the significant impact of the ongoing Iran-US crisis, which is reportedly driving up construction costs and leading to project delays. These challenges are primarily linked to the crisis's effect on imported materials, directly inflating expenses for operators in the prime market.

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From the day the Strait of Hormuz was closed, you found people, including those who were even producing in Nigeria, complaining about the Middle East crisis, and immediately prices started going up.

During a recent webinar, industry leaders observed that the period from 2022 to 2025 has been marked by unprecedented price fluctuations in construction and real estate. The closure of the Strait of Hormuz, for instance, was cited as a trigger for immediate price increases, even affecting those producing materials locally. This volatility has led many buyers to slow down their decisions, resulting in longer negotiation periods and an increase in joint ventures aimed at risk-sharing.

Institutional investors are now conducting more extensive due diligence and demanding higher returns before committing to projects. One expert suggested that much of the current market behavior stems from panic among end-users and buyers, rather than solely reflecting actual cost increases. This sentiment has created a more cautious investment climate.

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And one key thing is that many buyers have decided to slow down. So, we have seen longer negotiation periods than before this crisis.

Further compounding the issue are the lingering global supply chain disruptions originating from the COVID-19 pandemic and the subsequent Russia-Ukraine war. China's role as a global supply chain hub means disruptions there heavily impact industries reliant on its materials, particularly steel. The price of reinforcement steel per metric tonne reportedly surged from N150,000 during the pandemic to N500,000, prompting widespread concern.

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And for an industry that relies heavily on a lot of materials from China, this industry was heavily affected by the disruptions that came from COVID-19.